It is the first hybrid tender of the SECI in which every bidder will have to include a small storage system alongside its solar plant.

NEW DELHI: India's solar energy programme is taking the next big step by including storage facility in a project being offered. Although the move is seen raising cost, it will set India's ambitious renewable energy programme on a firm footing.

For the first time, solar storage will be part of a tender that staterun Solar Energy Corporation of India (SECI) will float in the next few days for 750 MW of installed capacity at Ananthapuramu Solar Park in Kadapa district of Andhra Pradesh.

It is the first hybrid tender of the SECI in which every bidder will have to include a small storage system alongside its solar plant, adding up to a total of 100 MW installed storage capacity. "This tender is probably the first of its kind in the world," said Ashvini Kumar, managing director of SECI.

"It will be a normal tender, but as a technical specification, we will ask for battery storage." Although their costs have come down rapidly, a big drawback of solar and wind energy is their 'infirm' or 'erratic' nature - they can be produced only when the sun shines or the wind blows hard. Hence, storing the power produced is vital if the power is to be made available round the clock. Yet, almost none of the solar plants set up so far include storage. This is because storage costs have yet to come down, the way production costs have in recent years. So far, as renewable energy use has grown, the focus in India has mostly been on quick evacuation of the power produced to the grid rather than storing it. KS Popli, chairman of Indian Renewable Energy Development Agency (IREDA), said the average storage battery costs about $450 per kwh, which will raise the cost of power.

"But at the same time, as renewable capacity increases, the integration process will have to be smoothened and storage will be a necessity. It is expected that in the next few years as the demand for storage rises and the technology improves, prices will fall."

Mechanisms for forecasting how much renewable power will be available each day (and informing the grid in advance) are being put in place. "Developers will have to work out how much deviation is there and how much it will be reduced by battery storage," said Kumar of SECI. "You have to go beyond the present stage of technology. This tender may trigger many more similar ones in future."

Naturally, he expects the bids received to quote prices much higher than in the Rs 4-5 per unit band that other solar bids in the recent past have thrown up. They will also be eligible for viability gap funding (VGF) "At present, consumers will have to pay higher tariffs for stored power," said Kameswara Rao, partner - energy & utilities, PwC India.

"The expectation is that storage cost will decline, as has been the case with solar and LEDs."

ET view: Storing Up On Storage Technology

Technological advances in storage is essential for the diffusion and deployment of solar energy. Including storage facility as part of the tender can push solar power developers to invest in this crucial element, or tie-up with developers working on storage facilities. A commercial interest in storage could see the necessary investment in R&D as well.